Kate Chaney (Curtin, Independent) Share this | Hansard source

I want to start by acknowledging that the government's first budget has been presented in a challenging economic environment. At a macro level, the outlook is pretty grim, with inflation peaking soon and growth slowing. Presenting a budget in these circumstances is difficult, balancing the need to provide relief with the need to not make things worse, the short-term concerns with the long-term imperatives. Overall, the October mini budget seems to be a pretty responsible budget. It still contains a $36.9 billion deficit but this is halved due to higher employment and commodity prices. This upside has been largely reinvested in budget repair. The budget contains some foundational work for incorporating climate change into our view of the world in adaptation and in litigation. It seems to be doing the right thing in resourcing the bodies we need to hold government accountable.

But there is further work to be done on longer term tax reform to ensure that we can actually pay for the things that we value in the decades to come. We still have a structural deficit. The hard work of getting onto a more sustainable path is not yet done. The budget contains minimal real tax reform apart from closing loopholes on multinational tax dodgers, which is expected to raise about $4.7 billion. I am hopeful that the May budget will start the longer term reform needed.

We need a tax system that's efficient, equitable, transparent and effective. We need to position Australia to deal with the demographic, social, economic and environmental challenges of the 21st century. We need adequate resources to provide quality education, health, aged care, child care and a decent income support system with dignity. There are a number of current problems with how our tax system is structured which will need to be addressed in the near future, ideally in the next budget. We are no longer a high-growth or high-productivity country. We have nearly $1 trillion in debt. Our tax system is complex, with duplication between states and the federal system and a lot of different types of taxes.

We have an ageing population with too much reliance on taxing workers. Income tax makes up half of all of our tax, which is one of the highest proportions in the world. We have an increasing burden on a declining proportion of the population. Australia's millennial generation is widely forecast to be the first generation since Federation to have worse economic outcomes than the generation before. The gap between the wealth of the old and the wealth of the young has almost doubled over the last few decades. People across the whole political spectrum are calling for tax reform, from Ken Henry, who conducted the last serious review of our tax system more than a decade ago, to Jeff Kennett, to the left-leaning McKell Institute—

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